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Actions Semiconductor CEO Discusses Q2 2011 Results - Earnings Call Transcript

And now, I’d like to turn the call over to Patricia Chou. Patricia.

Patricia Chou

Thank you for participating in Actions’ earnings conference call. We appreciate your continued interest in Actions. I will provide a business update and discuss financial results for the second quarter of 2011. As well as expectations for future performance.

Niccolo will be available during the Q& A portion of the call where I will translate from Mandarin to English on his behalf.

First, I would like to comment on the press release issued today announcing the CFO transition. Effective August 31st, I will be stepping down and Nigel Liu will be promoted to the job of CFO.

Nigel has been with Actions since 2007 in several finance-related functions. The Board of Directors and the management team are confident that his experience will provide a seamless transition for the position.

I have enjoyed my nearly five-year tenure with the company. And I continue to be optimistic about Actions long-term growth prospects. I will remain an adviser to the company following my departure.

Now, moving on to our financial results for the second quarter. As a reminder, our financials are reported in accordance with U.S. GAAP.

For the second quarter that ended June 30th, 2011, we reported a revenue of $10.5 million compared to $9.4 million in the first quarter of 2011. Our gross margin for the second quarter was 37.9% compared to 39.1% for the prior quarter. This slight decline in gross margin was mainly due to the higher volume of lower margin products sold.

For the second quarter, total stock-based compensation was $27 million compared to an expense in the first quarter of $0.6 million.

R&D expense was $5.6 million or 53.4% of revenue for the second quarter compared to $5.1 million in the first quarter. We anticipate our R&D expense to continue to represent a high percentage of revenue as we increase R&D talent to focus on our diversified product development initiatives. In addition, we are focusing more than half of our R&D resources in high-end new product development.

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